A new study suggests that Freddie Mac will be able to buy an additional $6 billion of mortgages in 1996 with its new loan limit of $207,000. That's the volume of mortgages that lie between Freddie's current limit of $203,150 and the new limit.

TRW Redi Property Data, a real estate information company, based its estimate on recorded mortgage deeds in 25 states, which make up 60% of total mortgage lending.

TRW's estimate suggests that Freddie's decision to raise its 1996 limit, while Fannie Mae holds its limit constant at $203,150, could be even more profitable than originally believed.

The Mortgage Bankers Association had estimated that Freddie would be able to buy only an additional $2 to $3 billion of mortgages under the new loan limit.

Of the $6 billion in additional mortgages, the largest portion would be in California. TRW estimates an additional $1.6 billion of mortgages in California could be sold to Freddie Mac with the new loan limit.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.